TIP SHEET

Top Five Tips to Drive Organizational Success as a Mission-Infused Nonprofit CFO

The role of the contemporary nonprofit CFO includes responsibilities that go

beyond traditional finance and accounting duties. According to Grant Thornton’s

2017 CFO Survey, respondents reported an increase in the finance department’s

involvement in multiple functional areas, including strategic planning, performance

management, and IT.

As CFOs become more involved in determining the organization’s goals and

strategies to achieve them, it is more important than ever for CFOs to lead the

effort in forging strong partnerships that keep finance and mission connected.

Build sustainable systems to support mission success.In my white paper, An Unsurprising Revelation: The Nonprofit Business Office is Closely Linked to Mission Success, I stated that mission-strategic decision-making requires confidence in the underlying integrity of the financial systems. It is critical to develop a dynamic, sustainable business model that can meet the fixed and variable needs of your organization today and in the future.

Be sure to: • Run unrestricted net assets either at breakeven or in surplus of budgets.

• Prioritize diverse revenue streams that enable the organization to cover

core program costs.

• Build an indirect cost rate into grants and contracts to minimize the gap

between indirect costs and direct cost recoveries.

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Be an organizational leader.The CFO must be an organizational leader, partner, and participant in the work and success of the nonprofit. When the CFO and finance team are driven by the mission and involved in the activities of the organization, this shared experience helps build partnerships and create alignment between finance, programs, and development.

Be sure to: • Establish and nurture mutually beneficial relationships with all parts of

the organization.

• Emphasize transparency and clarity of each program’s impact on the

bottom line and vice versa to build trusting relationships.

• Effectively communicate financial and mission goals to ensure that the

CFO, finance committee, and board share a common understanding of the

organization’s culture and priorities.

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Be a proactive strategic partner.As the leader of the finance organization, the CFO plays an invaluable role in determining the organization’s strategies and ultimately, in driving success. Therefore, it is crucially important that the CFO is a proactive, strategic decision-maker who moves the organization along the path to mission and financial success.

Be sure to: • Ensure effective cash management. Cash vs. accrual can be a trade-off

between short-term and long-term strategic decision-making. Strategic decisions should not be predicated based on cash on hand, unless the organization is in cash extremis.

• Make timely mission investments. Successful deployment of financial resources is critical for meeting strategic goals and opportunities.

• Increase development capacity. A fundraising capacity that identifies and builds sustainable, diverse revenue streams and significant unrestricted net assets allows the organization to supplement core earned income and restricted grants, pay for indirect costs, and build reserves.

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Make strategic investments in IT infrastructure.Carefully researched investment in new or existing software not only encourages transparency and better communication as part of the organizational culture, but it also integrates organization-wide systems so teams can more clearly understand the links between programmatic and financial successes.

Be sure to: • Adopt a financial management solution that bolsters your organization’s

processes and allows you to communicate key financial and mission data

to a diverse set of stakeholders.

• Use an effective cash management system that enables you to collect

cash efficiently, pay bills on a timely basis, ensure contractual timing of

cash receipts, and plan for cash needs when cash flow statements signal

periods of need.

• Streamline core business processes with integrated systems. Prioritize

integration of finance, development, and program data to identify funding

opportunities, trends, and risks to improve your fundraising capacity.

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Effectively communicate goals and outcomes to internal stakeholders.Ensure that you articulate your organization’s finance and mission story in a way that is compelling to your board and other internal stakeholders. Short-term and long-term strategic planning is predicated on the numbers.

It is important to communicate organizational goals and outcomes with clarity and transparency and present the financial narrative in an easily digestible format to inform the planning process.

Be sure to: • Provide accurate, timely, and useful information to your internal

stakeholders. Financial data that is accurately captured, analyzed, and

reported is necessary for strategic decision-making to happen.

• Tie expectations and outcomes back to the organization’s strategy.

Compare actual performance against budgeted goals to ensure that short-

term and long-term plans are rooted in financial reality.

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About Blackbaud

Leading uniquely at the intersection point of technology and social good, Blackbaud provides software, services, expertise, and data intelligence that

empowers and connects people to advance the social good movement. We serve the entire social good community, which includes nonprofits, foundations,

corporations, education institutions, healthcare institutions, and the individual change agents who support them.

About the AuthorRussell Pomeranz has thirty years of experience leading the finance and administrative departments of nonprofit organizations with missions related to social services, education, the arts, and think tanks. Pomeranz started his own consulting firm, The Claverack Advisory Group, to focus on the critical connection between the nonprofit finance function and organizational programmatic, strategic, and financial trajectories. Before establishing a consulting practice, Pomeranz was COO/CFO of the Vera Institute of Justice, director of finance at the Council on Foreign Relations, and CFO at Spence Chapin Services to Families and Children. He served as business manager of the Maret School, where he taught geometry, and served as adjunct assistant professor of public administration at NYU Wagner. He has also served on the NPCC Nonprofit Excellence Awards Selection Committee for the past several years.

Pomeranz is chair emeritus and current treasurer of Workforce Professionals Training Institute (WPTI), president emeritus of the Columbia County Historical Society, and treasurer of JobPath NYC. He also serves on the board of several other nonprofits. He has been published in The New York Times, Chronicle of Philanthropy, Wall Street Journal, and CPA Journal. He has a degree in economics from Haverford College and an MBA from the University of Michigan.

Want to learn more?

Make sure to check out the complete eBook, Three Roles of the Mission-Infused Nonprofit CFO That Lead to Organizational Success.

Read the eBook

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